According to Oregon Geographic Names, the name derives from a Native American legend. In the legend, a giant fish or other large marine creature would occasionally surface, much to the dismay of anyone fishing in the vicinity.
The lake is managed by the Devils Lake Water Improvement District. The Preservation Association of Devils Lake (PADL) was founded in 1982. According to the organization's website, its mission is:
To correct, protect and preserve the water resources and other natural assets of Devils Lake from misuse and pollution. To encourage the improvement of the overall environmental and economic use of the lake as a recreational, scenic asset for all time to the entire Lincoln City area.